Fiction writers have been for writing about such viral disease outbreak, Dan Brown’s bestseller novel Inferno is about a pandemic virus used as a genetic vector and it was made into a hit movie starring Tom Hanks.
Dean Koontz’s 1981 novel The Eyes of Darkness, about a virus, ‘Wuhan-400’ outbreak has become the most discussed book online. The Academy Award-winning 2011 movie Contagion, the plot which revolves around the outbreak of a virus has now become the most-watched film online.
Scientists have also long warned us about climate change, global warming and emerging infectious diseases with the potential to disrupt the economy and cause untold human sufferings.
Coronavirus (COVID-19) epidemic first reported from Wuhan, China on December 31st, 2019, at first confined to China and then soon spread across the world.
The World Health Organization (WHO) chief has said that as COVID-19 has got a foothold in so many countries, the threat of a pandemic has become “very real”. On March 11th, 2020, the UN health agency said the countries must “double-down” on their efforts to stop the spread of COVID-19, after announcing that the global emergency can now be described as a pandemic.
WHO tracked 1,438 epidemics between 2011 and 2018 and stated: “In addition to the loss of life, epidemics and pandemics devastate economies.” Many of the outbreaks in this period, including Ebola, SARS, MERS, H1N1, were able to be contained geographically.
Leaders around the world are anxious how severe the impact of COVID-19 outbreak will be for the economy and what the government and business organisations should do to cope with this disruption. There is no one-size-fits-all standard operating procedure that guides the managers on how to prepare their organizations for a global pandemic event, except the health advisory by the WHO.
Prime Minister Narendra Modi, participating in a video-conference with the leaders of seven other SAARC countries on March 15th, 2020 made a strong pitch to jointly combat coronavirus. Prime Minister Modi proposed setting up a COVID-19 Emergency Fund with India committing $10 million.
He also told the SAARC leaders: “We are assembling a Rapid Response Team of doctors and specialists in India, along with testing kits and other equipment. They will be on stand-by, to be placed at your disposal, if required”
A friend from Hong Kong said the Chinese word Zainan means disaster or catastrophe and alternatively means opportunity too. We should take a clue from this word and look for the opportunities offered by the threat.
Catastrophe is an unpredictable, large-scale event that creates a tremendous need to adapt and adjust as well as overwhelming feelings of threat, creating stress. If the potential stressor perceived as a threat, the secondary response occurs in addition to bodily and emotional reactions.
This secondary appraisal includes whether we have resources such as time, money, physical ability and so on to deal with the stress. Lessons from the organisations at ground zero of the countries with COVID-19 outbreak can provide clues into what works in a time of such crisis.
In a study by the University of St Gallen in Switzerland, of the effect of the virus and the resultant quarantines based on remote sensing data, such as satellite data and digital trace data, found that there is drastic fall in air pollution emission. Chinese government ordered quarantines of workers in various organisations in January.
The nitrogen-dioxide emissions in China fell by 38 per cent between January 24th, 2020, the start of the government-imposed quarantines in Hubei Province, and February 21st, 2020, the targeted “back-to-work” date in many Chinese provinces.
The numbers were more extreme closer to the outbreak’s epicentre in eastern China: Within Hubei Province, emissions fell by 53 per cent, and in the worst-affected industrial municipalities around Wuhan City, emissions plunged by as much as 85 per cent. This fall in emission level means a decrease in production.
It is estimated that the economic impact of a 38 per cent decline in emissions may indicate a conservative loss of up to US$ 215.6 billion to Chinese manufacturing during this period alone. The real economic impact of COVID-19 on the Chinese economy is likely to be far, far higher.
China is the manufacturing base many of the world’s leading multi-national companies. The effect of the decreased Chinese production is that their clients must find alternative sources of supplies, an opportunity for the many Indian manufacturers.
The Swiss study also analyzed electronic news and social media data from the most severely hit regions in China to better understand how COVID-19 has affected the Chinese economy. The steps that Chinese managers are successfully taking with the encouragement of Chinese authorities to mitigate the impact of the virus and its disruptions. These coping practices include having smart policies around remote work; anticipating and mitigating operational roadblocks; and addressing the social impacts of this health emergency.
Human resource management has been encouraging telecommuting for long as integral to maintaining normal operations during a crisis. Telecommuting is a work arrangement that enables a staff member to work at home from another off-site location for all or part of the regular workweek. The Chinese government’ encouraged telecommuting in efforts to return employees to work with the goal of having full productivity restored by the intended “back-to-work” day of February 21st, 2020.
Many Chinese companies began transitioning large portions of their non-manufacturing workforce to telecommuting after the end of the Chinese New Year, in late January. Of course, many jobs, particularly those in manufacturing, cannot be transitioned to remote work. Only 33 per cent of Chinese small and medium enterprises (SMEs), which employ 80 per cent of Chinese workers, were able to resume normal operations by the end of February.
While telecommuting is an option for Indian organisations, they would require HR policy, equipment and technology in place to make a quick transition. Job design must be compatible with such an arrangement, with the training of the employees and the supervisors. Emergency preparedness plan must include a disaster scenario that incorporates telecommuting.
The Swiss study also uncovered the struggles of many SMEs in China. SMEs contribute up to 60 per cent of China’s gross domestic product. Chinese SMEs particularly those in manufacturing, tourism, and construction, operate on small margins and are burdened with debt. The data shows that the lack of available operating funds is one of the most frequent concerns of these SMEs.
The middle of a crisis is the worst time maintaining operations, whether it’s finding the cash to make salary payments or finding alternative suppliers because the regular sources have shut their business.
Many Chinese companies were completely unprepared for the need to find new suppliers. To support SMEs with short term loans the Chinese government has earmarked the US $114 billion in February. This week the US government has created a financial relief package of US$ 100 Billion.
Already, in India, we see the effect of COVID-19 on shopping malls, cinema halls, hotels, the travel industry and the domino effect on other sectors would be soon visible. Here in Assam, tea export, poultry industry, travel industry, cinema halls, resorts and hotels are already taking a beating. Working capital will be a major issue with dwindling cash on hand.
A safety net would be required to cover immediate expenses, such as salaries and debt payments. The India government is working on a financial package for the COVID-19 hit sectors. It has set up an Economic Response Task Force under Finance Ministry to suggest support for the middle, lower-middle and poor sections of the society. Industry bodies have suggested direct cash support to the vulnerable sections of the society and moratorium on debt-servicing, relaxation of the NPA-norms, interest rates cut by RBI.
Disasters such as COVID-19 offer opportunity for large companies to fulfil their corporate social responsibility. Corporate charity is not only ethical but is a good practice and help increase the brand equity of the company. It has been empirically established that there are strong correlations between charitable activities and future financial performance, reputation, improved relations with government agencies.
In China, the Hubei Huanggang Agricultural Development Co. donated 220 tons of vegetables to families in the worst-affected areas. The Alibaba Group established a $144 million medical supply fund for hospitals in Hubei Province. The Wuhan Charity Federation reports that it raised over $400 million from corporate and private donations in less than two weeks to support communities affected by the outbreak
Diseases and other forms of ecological disasters are a new reality and can disrupt operational continuity. Leaders and managers must study the best practices of organisations at ground zero of the countries with COVID-19 outbreak, which can provide ideas what works in maintaining operations during the pandemic crisis.
The writer works independently as a Quality Management consultant and has implemented ISO Quality Management System, Environmental Management System, Occupational Health and Safety Management System and Energy Management in scores of service and manufacturing organisations.
He teaches Human Resource Management at post-graduate level in Gauhati University, a visiting faculty at Assam Administrative Staff College and trainer with many other public and private sector organisations.
The views expressed by the author are personal and may not in any way represent those of TIME8.
Photo credit: @himantabiswa